A strong focus on data quality will be necessary for financial institutions set to be affected by the Basel III legislation.
This is according to a report on the Finextra website, which explained the regulation will require banks to have sufficient capital to return deposits should they go through difficulties, making them less dependent on the credit markets.
It said these companies should now be assessing what changes are needed to their IT infrastructure as capital ratios have been agreed and the 'liquidity framework' is now going through an observation process.
The article said data quality will be the "biggest challenge" when it comes to complying with Basel III.
"IT systems will need to have the functionality to produce consistent and accurate data based on multiple models and real-time calculations, which correlate across divisions and asset classes," the report explained.
The intention of the legislation is to strengthen transparency and disclosure practices at banks, as well as improving risk management and governance at such organisations.
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